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Industry NewsEurope crosses overAn industry observer pacing themany large halls of the IAA auto showin Frankfurt could have been in nodoubt about the biggest and mostbrashly proclaimed design trend – thetransformation of hatchbacks, sedansand even minivans into high-riding,terrain-hungry crossovers.Right across the segment spectrumfrom small and mainstream – Suzukiand Honda – to rich and famous, in theremarkable shape of Jaguar and Bentley,crossover and SUV were the corporatebuzzwords, and even a long-dormantGerman name, Borgward, feted forits Isabella TS sports sedan, emerged from its 50-yearhibernation as a Chinese-built SUV. Citroën’s C4 has nowmorphed into the 30 mm taller Crossback, the SEAT Leon SCCross Sport previews an off-road style hot hatch, and staplessuch as the Volkswagen Tiguan, Kia Sportage and BMW X1 arerenewed in shapelier and sportier formats.But for sheer audacity, concept studies from Europeanfocused Japanese brands Nissan and Toyota point towardsa new breed of aggressively coupé-like crossovers whichsacrifice family practicality for macho Dakar-like presence.Nissan’s Gripz is tipped to be the future direction of its sportyZ sub-brand and houses a hitherto unseen hybrid powertrain,while Toyota’s more polarizing C-HR will be launched in mildlytoned down form in 2016 as the company’s contender in themedium crossover segment.In engineering terms, particularly when it comes to superluxury SUVs such as the Bentley Bentayga and its upcomingAston Martin and Rolls-Royce rivals, vast technical resourcesare being brought into play to enable the vehicles to meet theexacting – but often conflicting – customer requirements ofsupercar dynamics, limousine-like comfort, and the ability totackle rocky mountain tracks, muddy fields and desert sanddunes without breaking sweat.The Bentley Bentayga(above) is the firstentry into a superluxury SUV segmentthat is expected tobring handsomerewards; the NIssanGripz (left) conceptmarries crossover andsports coupé designthemesClean power takes to the waterThe San Francisco Bay Area will soon have a zero-emission ferry ifa feasibility study for a hydrogen fuel cell powered service provessuccessful. Developed by Sandia National Laboratories – whichhas already completed several dockside fuel cell power schemes –and the Red and White Fleet ferry company, the vessel will use anestimated 1000 kg of hydrogen each day, which in turn demands afuelling station twice as large as anything yet built.High speed is an important factor in the boat’s potential as theservice must compete not just with other ferries but also publictransport and private car travel. The scheme’s promoters point outthat the ferry will not only reduce atmospheric pollution but alsoreduce the risk of contamination from fuel spills.Norway already has a zero-emission ferry service in the shapeof the Norled Ampere, operating a 6.5 km crossing in Sognefjord.Developed in conjunction with Siemens, the silent, aluminium-hulledNorled is the first battery-powered ferry in the world and takes 360passengers and 120 vehicles.As the weak local power infrastructure ruled out direct rechargingof the ferry’s batteries at each 10-minute turnaround, Siemensinstalled large lithium-ion buffer batteries at each dock; tricklecharged throughout the day, these batteries are able to give the6 RQ Q3 2015Norled’s on-board batteries a 265 kWh boost each time the ferrydocks.With Norway’s electricity grid being exclusively hydroelectric,the zero-emission ferry provides a notable win-win, saving anestimated 1 million litres of diesel a year as well as 2680 tonnes ofCO2 and 37 tonnes of nitrogen.

Industry NewsHybrid pioneer, take 4Much anticipation surrounded the debut of the new ToyotaPrius, the fourth generation of the model that has broughthybrid driving to the volume market worldwide.Superficially similar in profile to its predecessor, butlonger and lower and with a new aerodynamic treatmentat the rear, the new Prius is the first model to be built onToyota’s New Global Architecture, or TNGA, allowing for alower centre of gravity.Full technical details have not yet been revealed, but the1.8 litre engine now claims a thermal efficiency of over 40percent, the first time a gasoline unit has reached this figure.Significantly, the battery remains nickel metal hydride, andimprovements to the driveline have been targeted at raisingrefinement and reducing CO2 emissions by 18 percent.Without giving precise figures, Toyota claims the newmodel offers the biggest leap yet in overall performance, andthe claimed CO2 improvement would put it at around75 g/km – well ahead of even the very best diesels.Capturing exhaust energyFrench supplier Faurecia has become the first in the world tooffer a system to capture and exploit exhaust heat, which canrepresent up to 30 percent of the energy content of the fuel andwhich is largely wasted.The Exhaust Heat Recovery System (EHRS) will initially appearin trucks, where long distances at constant speed providefavourable conditions for energy recovery: the company claimstruck economy can be improved by 5 percent or more, with theEHRS producing up to 15 kW of mechanical power.Passenger car applications could follow around 2022, and inhybrid models the system would generate 1 to 2 kW of additionalelectrical power to improve fuel economy by 7 percent and reduceCO2 emissions by 9 g/km.The underfloor-mounted EHRSunit operates on the Rankinecycle, with a heat exchanger placedin the exhaust stream evaporating aworking fluid, which then powers a steamturbine; when the steam is condensed ittransfers its heat to the vehicle’s coolingsystem to aid warm-up.Faurecia is also working on a solid-statethermo-electric generator with no movingparts, and in the US Alphabet Energy and Borlahave developed the PowerModule thermo-electricgenerator claiming to be able to recover 5 to 10percent of a car or truck’s waste exhaust energy– for fuel savings of between 3 and 6 percent.ViewpointMuch more than just achange of nameRobert Bell – MD Ricardo Energy & EnvironmentDuring the summer, while manyRicardo customers and employeeswere enjoying a well-earnedvacation, we took the step ofchanging the brand of the formerRicardo-AEA to become the newRicardo Energy & Environment.This change of name follows lessthan three years after we becamepart of the Ricardo plc group inNovember 2012, a highly successfulperiod in the development of ourenvironmental consulting businessand one during which we havebecome a key part of the Ricardogroup strategy.While we remain the samecompany and team in all otherrespects, the rebrandinglooks to the future and moremeaningfully reflects ourproducts and markets. WhenAEA Technology was acquiredby Ricardo plc in 2012, we felt it washelpful for our clients to maintainthe AEA reference point for a while.We now believe our brand reputationand strength has transferredsatisfactorily to the Ricardo name,and so we can look forward.However subtle it might appearat first sight, the name RicardoEnergy & Environment is for mealso a much bolder reflection of ourambition to address some of thetoughest environmental and societalchallenges faced by the world in thecentury ahead. We help our clients asthey seek to tackle climate change,improve air quality in the world’slargest cities, or find solutions fortopics ranging from sustainabletransport to waste managementand hazardous chemicals. We helpcountries - from the richest to thepoorest - to develop and prosper.“Howeversubtle it mightappear at firstsight, the nameRicardo Energy& Environmentis also a muchbolder reflectionof our ambitionto address someof the toughestenvironmental andsocietal challengesfaced by the worldin the centuryahead”Ricardo Energy & Environment needsto be at the forefront of global thoughtleadership.Following on from the integrationof PPA Energy into our business atthe end of 2014, the summer of 2015also marked the acquisition of waterindustry consultancy Cascade. Theseacquisitions broaden our capabilitiesstill further and enable us to addresstwo additional global issues – watershortage and the development ofmodern electricity systems. Theseprogrammes provide an extremelytangible indication of the seriousnessof our strategic intent.In short, I believe that we havedriven our business so far in such ashort period that the time is clearlyright to move on. For me, our changeof name is much more than justa subtle re-branding. It is both areflection of what we have collectivelyachieved to date, and it representsnothing short of a statement ofour commitment and intent to bethe leading source of energy andenvironmental consulting in the world.RQ Q3 20157

Interview: BMWINterviewStrategy Number OneAs the global leader in premium car sales since 2005, BMW is being chased by ahighly ambitious Audi and a fast-recovering Mercedes-Benz. Tony Lewin trackeddown sales and marketing director Ian Robertson and vice president for productmanagement Hildegard Wortmann at the Frankfurt Motor Show to learn BMW’ssecrets and hear how it plans to face a low-carbon futureHow far ahead does BMW plan?Hildegard Wortmann: It depends on what level of detail you aretalking about, but we certainly have a scope of some 15 to 20years; we have a long term vision of where the journey could go.Year by year you come closer to it and it becomes more precise.It’s not just products, it’s technologies and more. We try toimagine what will be relevant 20 or 25 years ahead and work ourway back from there to see which way to go.So you are organized for Euro 7, the 2025 CO2standards and beyond?HW: Yes certainly, and we are already thinking about the nextgeneration of the 7 Series here today as well as concepts andproducts after that. It always sounds strange because we are onlyjust launching our 7 Series now. But if you look at the new plug-in7 Series, you have a car with 49 grammes: only a couple of yearsago we would have been very happy to have a 3 Series with under100 grammes.The BMW Group sold over 2m cars last year. How muchfurther does it need to expand, and is there a ceiling?Ian Robertson: It depends on what you mean by expansion. Ifyou mean continuing to grow, then that is always in our mind.The car market continues to grow and different nations becomesignificant car customers. I remember in China in 2008, wewere selling 66,000 cars [a year] and had a mid-term objectiveof 100,000; two years later we were at 169,000 and last yearwe did 455,000. So there was an opportunity that not only gaveus expansion but which also offset some of the risks we werehaving in the US and Europe at the time. We are always looking formarkets that are developing as well as segments that are movingforward.Your Number One strategy commits you to remainingthe top premium car producer in the world. If, say, Audi goesbeyond 2m units, do you have to keep step?IR: No, ‘top’ does not necessarily mean overall volume leader,though volume is still important. Audi has an A1 and in the samesegment, our offering is called Mini – so long as you bear that inmind, we are significantly ahead in overall volume. Of course thereis always a brand comparison - I can tell you that between thethree German premium brands, we are competitive and we look ateach other’s performance every month.Is it an industrial thing, or a matter of pride?IR: It’s a question of many things. You can’t continue to besuccessful without growth, in my view; we need to protect ourshare of the market. When I am setting my budgets all around theworld, clearly we have targets for volume, targets for profitability,targets for segment share. If a market deteriorates for whateverreason, we might not get our volume but I’m really keen that weget our segment share.Do you need to expand your range of models any further, ormight you reduce the numbers as Mini has done?HW: It depends on how the markets develop and the trends thatemerge. As you are aware, there is a big trend towards more Xmodels and more SUV car concepts, and within that we have foundopportunities – the sport activity coupéslike the X6 and now the X4. We’ve alreadyhad one generation of the X6 and nowour competitors are coming with similarconcepts. So it’s not a question of how manyderivatives you have, but one of identifyingnew segments and new customer needs.That’s really the driving force, and not thecounting of [pieces on] a chess board.“Clearly, electrification ofpowertrains is not going to goaway again. There will be a relevantpart of our future portfolio that iselectric [and] plug-in hybrid”Hildegard Wortmann8 RQ Q3 2015IR: In terms of new products and newsegments, the checkerboard of segments

Interview: BMWand types of body style has become quite full in the last few years.That’s not to say that there aren’t one or two [more] that we couldstill find, but I don’t think the pace of development seen in the lastten years will continue over the next ten years. Maybe we will eventake some decisions to rationalize one or the other, too.How far do you see BMW’s i division growing as aproportion of overall sales?IR: In our own minds, we see i as the opposite bookend to M. M isa relatively small volume but has a huge influence over the rest ofthe range. We sell M5s and M3s in relatively small numbers, butcustomers who buy, for example, a BMW 318 with an M-Sportsteering wheel or M-Sport alloys are really aspiring to an M car,so the influence, the business and the profitability that comesfrom M is significantly higher than just the M vehicles. The same isoccurring with i: we are now seeing i technology moving into othercars, and the result of that is that BMWs, with their core DNAintact, now offer zero emissions when you need it.HW: Clearly, electrification of powertrains is not going to go awayagain. There will be a relevant part of our future portfolio that iselectric, plug-in hybrid, or whichever degree of electrification[that is needed]; when and how much, that’s the question thateveryone is asking and no one can yet answer. Just look at howmuch has changed in recent years.Will you be launching other standalone i models tosupplement the i3 and i8?IR: Yes we will. Into which sector is something we are assessing atthe moment. We have a number of options on the table and in themonths ahead, we will take the next decisions.HW: I can imagine a lot of things andclearly there is a lot of space between i3and i8, but it is not a key focus area for usright now and we’re not saying that we willblast out another five models from BMW i;but of course just an i3 and an i8 might notbe sufficient.Is the success of Tesla somethingof a wake-up call?IR: Tesla have been announcing theirexpansion for several years, and it appearsthat it is maybe about to happen now. Wetake all competitors seriously and Mr Musk and his team have donea pretty good job in many respects. But we are shaping our [own]future, so from that perspective, they are just another competitor.HW: I’m glad that Tesla is there, because what they have donehas made electromobility a bit more sexy and has spiced up thebusiness. On the other hand you have to put it into perspective:with just 30,000 cars worldwide it is nowhere near where BMWis as a company, and the US market and California are a verydifferent business model. Of course we are watching them, but ifyou look at the BMW i story it is a sustainability story through andthrough, and the complete value chain is sustainable. Offering asports car weighing 2.5 tonnes – you can question whether that isefficiency and a sustainable concept.IR: Many factors [in the EV sector] are changing. Batteries will getbetter, range will improve, costs will come down. Equally, as a resultof increasing regulatory demands when it comes to the emissionsof combustion engines, they are becoming more expensive, whileelectric engines will get cheaper, as that technology develops. Atsome point, those costs will cross over – do I know exactly wherethis is? No, but there are clear trends in that regard and eventuallythat will make electric drive a different proposition. Would wemake a full-blown electric vehicle in a luxury-car segment at themoment? Technically, that’s something that could be done, but wewould have to consider it very, very carefully.How would autonomous or self-driving vehicles fit inwith BMW brand values?HW: First of all, if you’re talking about a car that’s autonomousand completely driverless, it’s an illusion to think that it will be“Equally, as a result of increasingregulatory demands when it comes tothe emissions of combustion engines,they are becoming more expensive,while electric engines will get cheaper”Ian RobertsonThe new-generation7 Series just launcheduses a carbon corecentre structure tosave weight; drivelinechoices include theplug-in hybrid 740ecapable of 49 g/kmCO2 emissionsRQ Q3 20159

Interview: BMWAverting a crisisHow did BMW weather the 2008 financial crisisso much better than its competitors?Ian Robertson: First of all, the financial crisis was largely a surprise foreverybody and for every industry. Perhaps the most surprising thing was thatthe whole world moved in a negative direction at the same time. [At BMW] wehad a number of advantages. We had started to develop Strategy NumberOne the year before, so we had been thinking of a number of scenarios, andvolatility was part of our thinking. We had already pre-planned some ‘what-ifs’.But I think the most important thing we did was to react very quickly to a set ofcircumstances that were difficult to read and draw conclusions from.I can remember a very important discussion we had at the Paris auto showin [October] 2008, when I was looking at our monthly figures for Septemberthat year. They were coming through on my Blackberry (which is what I wasusing at the time) and they were minus 30, minus 35, minus 40 – and it waseverywhere. I said to [CEO] Norbert Reithofer, “

Ricardo Quarterly Review. Qx 2011 The task of RQ is to highlight the latest thinking in global engineering and technology in the transportation and clean energy sectors and related industries. We aim to achieve this by presenting an up-to-date mix of news, profiles and interviews with top business leaders, as well as in-depth features on